Money Monday!
I think we often forget the difference between a need and a want. Obviously we know the difference, but how many people purchase a Wii on credit? Maybe they get the credit card thinking, "We need a new bed and this is the only way" or, "Our car broke down and this is the only way to pay for the repairs." It doesn't matter if they use the credit for emergency repairs, if they are purchasing a Wii at about the same time they might as well buy the Wii on credit.
There are times when you can spend money on wants. If you have consumer debt or need debt for living expenses you SHOULD NOT be purchasing wants. In my opinion if you aren't Bill Gates then you shouldn't be purchasing wants. However, that is a little extreme.
5 Simple Steps to Need VS Want:
- Ask yourself, "Is this a need or a want?"
- Don't make impulse purchases. Giving yourself time to think about the purchase will help you distinguish if it is truly a need or a want.
- Create an allowance in your budget for wants.
- Repair instead of replace broken or worn items.
- Destroy credit cards if they are a temptation. I think with a little discipline, credit cards are better than traveling with cash, but an alcoholic shouldn't hang out in bars. A shopoholic shouldn't carry cards.
As always, be smart and thrive.
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